July 19, 2005

Senate supports U.S.-backed loans for China

by ssavage

WASHINGTON (Reuters) - The Senate on Tuesday gave the green
light to U.S.-backed loans to build nuclear power plants in
China, setting up a fight with the House of Representatives,
which voted to block the deal that lawmakers said would
subsidize the emerging economic powerhouse.

The Senate rejected 62-37 an amendment that would have
barred the U.S. Export-Import Bank from granting $5 billion in
loans for China to build nuclear plants to help meet its
burgeoning power needs.

The Senate vote was a win for Westinghouse Electric Co.,
which is bidding to build four huge nuclear reactors in China
in a deal backed by the Bush administration.

Senators voted on the measure as they considered a $31.8
billion bill to fund foreign aid programs and the State
Department, which they were expected to approve on Wednesday.

The loan issue must be resolved by House and Senate
negotiators who will work out a final version of the bill.

In an unusual Senate alliance, conservative Oklahoma
Republican Tom Coburn and liberal California Democrat Barbara
Boxer pushed to halt the loans that the Export-Import Bank gave
preliminary approval to in February.

"It seems insane that we would give a subsidy to finance
the export of American technology," Coburn said. "I believe 20
years from now we'll be buying nuclear power plants from the
Chinese."

But Sen. Rick Santorum, a Pennsylvania Republican, said his
state stands to benefit from some of the 4,000 to 5,000 U.S.
jobs that would be generated if Westinghouse got the deal with
China.

Arguing for maintaining the Ex-Im Bank funds, Santorum said
it would help the U.S. trade deficit with China and ease the
world's demand for fossil fuels.

"We should be encouraging them (China) to build this kind
of technology," Santorum said, adding that "it's a wise move
for China to build this kind of generating capacity."

Coburn and Boxer complained that Westinghouse is owned by
British Nuclear Fuels Corp., which is owned by the British
government and that Japan's Mitsubishi Steel would also benefit
from the Ex-Im Bank loans.

"You know what I say? Let the Russians have this deal. Let
the French have this deal. ... Let them put their taxpayers at
risk," Boxer said.